PARIS, Nov 1: Brazilian farmers receive a fraction of the government support offered to their counterparts in Europe and the United States, but they would gain substantially from a global deal to open trade in agricultural products, a report from the OECD says.
The OECD said that a 50-per cent cut in tariffs and export subsidies worldwide and a 50-per cent cut in farm support in countries covered by the Organisation for Economic Cooperation and Development would provide Brazil, a country of “vast agricultural resources”, with a valuable economic boost.
The OECD, in a report published on Monday, estimates that a rise in incomes for consumers and producers arising from reduced prices and increased trade would benefit the Brazilian economy by 1.7 billion dollars (1.4 billion euros), the equivalent to 0.3 per cent of gross domestic product.
Members of the 148-member World Trade Organization are currently working together on a new international agreement for trade in farm products and services with the aim of reducing government support and trade barriers.
Government support in Brazil represents three per cent of farm receipts compared with 17 per cent in the United States, 34 per cent in the European Union and an average of 30 per cent in OECD countries.
However, freer international trade would require policy adjustments from the Brazilian government as the benefits would not be evenly spread, the OECD warned.
Big farms are set to gain from the reduction in trade barriers, while the small, family-run farms would suffer from increased competition.
The OECD, which represents 30 industrialised nations, estimates that 60 per cent of Brazil’s rural population has an income below the absolute poverty line of half the minimum wage.
In the latest round of inconclusive WTO talks last week, the European Union offered to cut its highest farm tariffs by 60 per cent and lower tariffs by 35-60 per cent. The United States wants tariffs to be cut by 55.0-90.0 per cent. —AFP
